Statement Of Comprehensive Income Using Multi Step Approach

Sales php80 000 00 merchandise inventory beg php5 000 00 sales discount 5 000 00 net purchases 10 500 00 sales returns 2 000 00 freight in 8 000 00 merchandise inventory end 3 500 00 general expenses selling expenses 12 000 00 4 000 00.

Statement of comprehensive income using multi step approach. This format coupled with functional basis of classification of expenses is the best available format from understandability point. Compute income from operations gross profit operating expenses step 3. Multi step income statement is the income statement of the company which segregates the total operating revenue of the company from non operating revenue and total operating expenses of the company from non operating expenses thereby separating the total revenue and expense of a particular period into two different sub categories i e operating and the non operating. Compute net income income from.

Explanation on the cost of goods sold net purchases category of operating expense and the difference between nature versus function approach of sci. Multi step income statement entities around the world even if they are using different accounting frameworks they use this method to prepare income statement. As you can see this multi step income statement template computes net income in three steps. It presents the revenue expenses and profit or loss generated by the business during a particular period but it uses a single equation to calculate profits.

A statement of comprehensive income is the overall income statement that consolidates standard income statement which gives details about the repetitive operations of the company and other comprehensive income which gives details about the non operational transactions such as the sale of assets patents etc. But don t depend solely on it. The multiple step profit and loss statement segregates the operating revenues and operating expenses from the nonoperating revenues nonoperating expenses gains and losses. A single step income statement uses a single equation to compute the net income of the business and it is a more simplified report compared to a multi step income statement.

An alternative to the single step income statement is the multiple step income statement because it uses multiple subtractions in computing the net income shown on the bottom line. Prepare the statement of comprehensive income using a multi step approach.